Licence option exercised

Sterling Energy PLC
08 July 2004



          Sterling exercises option on West African offshore oil find

Sterling Energy plc ('the Company') has exercised an option to take a 5% working
interest in a block containing the unappraised Sinapa oil discovery, offshore
Guinea Bissau in West Africa.

It follows the completion last April by Premier Oil as Operator of the Sinapa 2
well on Offshore Block 2.  Sinapa 2 found oil in reservoir sands but, due to the
design of the well, flow rates were not tested.

The option over the Sinapa permit is one of two held by Sterling offshore Guinea
Bissau as a result of an agreement in May 2003 that Premier Oil reached with
Fusion Oil & Gas. Fusion was subsequently acquired by Sterling late last year.
The other option covers the undrilled Esperanca permit nearby. In each case,
Sterling's option to participate follows completion of the first well at
Premier's expense.

Sterling Chief Executive, Harry Wilson, said: 'Although Premier announced that
reservoir quality was only moderate, we believe the Sinapa 2 well was highly
significant in proving the presence of a light oil petroleum system with very
positive implications.  The well also proved the presence of good quality
reservoir sands, although in this instance they were not oil bearing.  There are
a number of similar features to be tested, and we also believe the same promise
extends beyond Sinapa and Esperanca into our Dome Flore permit in the AGC Zone
between Guinea Bissau and Senegal.'

Along with Premier Oil (55%), Occidental Petroleum also holds an interest in the
Sinapa permit (40%). The state company of Guinea Bissau, Petroguin has a back-in
right for 30% of any development, which would reduce Sterling's interest to
3.5%.

Sterling looks forward to the Operator's forward work programme on Sinapa and
Esperanca once the evaluation of Sinapa 2 is completed.

.




For further information contact:


Harry Wilson, Chief Executive, Sterling Energy plc:      01582 462 121

Nigel Quinton, Operations and Technical Director, 
Sterling Energy plc:                                     01582 462 121

Allan Piper, First City Financial Public Relations:      020 7436 7486
                                                         07736 064 982

Rob Collins, Evolution Beeson Gregory:                   020 7071 4311




                      This information is provided by RNS
            The company news service from the London Stock Exchange